Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 18th, 2015
Benefits & Administration
Disruptions Take a Bite Out of Retirement Savings
Major life events—unemployment, divorce, serious health issues, buying a home—can disrupt long-term savings and investing, and negatively impact retirement plans, according to TD Ameritrade’s 2015 Financial Disruptions Survey. The survey explores the impact of these life events on the average American’s long-term savings habits, reveals a frightening economic hit and uncovers lessons learned.Read more >
An emphasis on non-traditional wellness initiatives is growing as employers try to cut health-related costs, a survey finds. Fifty-nine percent of businesses offer wellness initiatives primarily to invest in or increase worker health and engagement, while 41% aim to control or reduce health-related costs, according to a survey from the International Foundation of Employee Benefit Plans. Approximately one in four (26%) organizations with wellness initiatives is analyzing the return on the investment (ROI) of their programs, and 93% are achieving positive results.Read more >
Fitch Warns of Volatility in Public Pension Reporting
The higher ratios of assets to liabilities being reported by many public pension systems in fiscal 2014 under new Governmental Accounting Standards Board Statement 67 (GASB 67) should be viewed with caution, Fitch Ratings warns. The agency says most public pension systems are reporting materially higher asset values under the new GASB standards, reflecting immediate recognition of several years of strong market gains not yet fully incorporated under the asset smoothing practices allowed by previous GASB standards. According to Fitch, reported asset values are now fully subject to market cyclicality, and thus the ratio of assets to liabilities reported by systems will rise and fall far more sharply than the funded ratio reported under prior GASB standards.Read more >
Sponsored message from SEI
SEI’s DC Trends Research Series investigates the actions plan sponsors are taking in terms of simplifying the menus of their defined contribution plans.Read more >
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Market Mirror

Word that a compromise could be in the works for Greece and its creditors helped send major U.S. stock indices marginally higher Tuesday afternoon, according to the Associated Press. The Dow was up 28.23 points (0.16%) at 18,047.58, the NASDAQ ticked up 5.43 points (0.11%) to 4,899.27, and the S&P 500 increased 2.98 points (0.15%) to 2,100.22. The Russell 2000 increased by 1.91 (0.16%) to 1,225.04, and the Wilshire 5000 closed 31.49 points (0.14%) higher at 22,152.31.

 

On the NYSE, 3.2 billion shares changed hands, with 1.3 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares traded, with a 1.3 to 1 ratio of advancers to decliners.

 

The price of the 10-year Treasury note decreased 25/32, bringing its yield up to 2.144%. The price of the 30-year Treasury bond fell 1 20/32, increasing its yield to 2.733%.

Compliance
IRS Announces Retirement Plan Webinars in March
The Internal Revenue Service (IRS) has announced two free webinars in March about the second cycle E determination letter application process and retirement plan loans to participants.Read more >
Firm Not Liable for Botched Benefit Estimates
A lawsuit filed by a former Banco Popular de Puerto Rico (BPPR) employee claiming his monthly pension benefit was substantially lower than the amount promised during his working years has been tossed out by a federal appeals court. According to an appeals court’s opinion, Alfredo Guerra-Delgado could not demonstrate that the plain language of the plan as adopted requires that he be credited for the years he worked at other firms. Rather, he alleged that those years should be counted because various fiduciaries of the plan represented to him that they would be counted.Read more >
Agencies Request Input on Multiemployer Plan Guidance
Regulators are looking for input from stakeholders in the multiemployer retirement plan industry before issuing guidance about the recently passed Multiemployer Pension Reform Act of 2014 (MPRA). In a request for information (RFI) from the Pension Benefit Guaranty Corporation (PBGC), the agency is asking for input about expanded rules for partitions and mergers of multiemployer plans. In a request for information from the Internal Revenue Service (IRS), that agency notes that the MPRA generally permits a sponsor of a multiemployer defined benefit (DB) plan that is in critical and declining status to suspend certain benefits following the provision of specified notice, consideration of public comments, approval of an application for suspension and satisfaction of other specified conditions, including a participant vote.Read more >
Investing
Net flows to stock and bond funds totaled $30.5 billion in January, led by a $14.9 billion net intake to Taxable Bond funds, according to Strategic Insight (SI), an Asset International company. U.S. Equity funds slipped into outflows during a volatile month, losing $2.7 billion. U.S. Equity index funds took in $17.6 billion; however, active funds had outflows of $6.8 billion, and U.S. Equity exchange-traded products (ETPs) posted outflows of $13.6 billion in January.Read more >
Small Talk
Sometimes it’s tempting to make a dramatic exit, and workers may not consider the future implications of how they quit a job. Nearly nine in 10 (86%) human resources (HR) managers interviewed said the way employees quit a job at least somewhat affects their future career opportunities. HR managers were asked by OfficeTeam to recount the most unusual way they have heard someone quit a job.Read more >
ON THIS DATE: In 1564, the artist Michelangelo died in Rome. In 1861, in Montgomery, Alabama, Jefferson Davis was inaugurated as the President of the Confederate States. In 1885, Mark Twain published “The Adventures of Huckleberry Finn.” In 1929, the Academy of Motion Picture Arts and Sciences announced the winners of the first Academy Awards. In 1972, the California Supreme Court struck down the state’s death penalty. In 2001, Dale Earnhardt Sr., considered one of the greatest drivers in National Association for Stock Car Auto Racing (NASCAR) history, died at the age of 49 in a last-lap crash at the 43rd Daytona 500 in Daytona Beach, Florida.
WEDNESDAY WISDOM: “Some people drink from the fountain of knowledge, others just gargle.” —Robert Anthony, an American organizational theorist and professor of management control at Harvard Business School
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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